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HISTORY : How Tun Mahathir Turned Malaysia With Weak Agrarian Economy Into One of the Asian Tigers

“Mahathir Mohamad turned Malaysia into one of the developing world’s most successful economies. He adopted pragmatic economic policies alongside repressive political measures and showed that Islam was compatible with representative government and modernisation. He emerged as a Third World champion and Islamic spokesman by standing up to the West”, Amazon.com has this to say about the book. To say that Tun Dr Mahathir’s decisions, when Prime Minister, had affected Malaysians from all walks of life, is not an overstatement. We can learn to be a professional handler of diversity in working place from Tun Mahathir. He was fully understand of the diversity in Malaysia and treated every racesand ethnic as fair as possible. Although he is a Malay, but he never forget to purge all Malaysian to learn from the more hardworking and entrepreneur Chinese in Malaysia. New York has the Empire State Building. Think of Paris and the Eiffel Tower comes to mind. Cairo is inseparable from the Pyramids. Singapore has the smaller but not less iconic Merlion. George Town has the Penang Bridge, if you take a liberal view of the city’s boundary and ignore the unpleasant monolith towering over the island. The Sultan Abdul Samad Building stood as Kuala Lumpur’s chief landmark for almost a hundred years. But on one fine morning in the late 1990s, two bluish skyscrapers dethroned the onion coppered-domes structure as the new symbol of Kuala Lumpur. The Petronas Towers emerged as the world’s tallest building. This was possible due to one man. He is Mahathir Mohamad, the fourth Prime Minister of Malaysia. The man did more than merely changed the landmark of the city. The symbolism – the switch from a building of colonial origin to one of contemporary Malaysia – reaches out with a far greater nuance. It represents the Malaysian industrial revolution that happened under his watch. Mahathir’s industrial revolution of the 1980s and the 1990s overturned the highly inflexible calcified society. Fewer sons and daughters of fishermen and farmers took up their parents’ low-paying professions. Capital accumulation became possible for more and more people, freeing them from suffocating unjust feudalism. They participated in the cogs of modern economy and migrated to the cities at an unprecedented rate. The rapid urbanization created or expanded towns like Petaling Jaya and Subang Jaya – a manifestation of the industrial revolution – to cater to the housing needs of the new urban middle class. It was not just wealth that began to build up outside of the feudalist circle. Political power did too. Mahathir is the first prime minister who has no blood ties to the royal court. The other Prime Ministers were or are all blue-blooded, with the exception of Abdullah Ahmad Badawi, Mahathir’s immediate successor. Malaysia experienced its fastest economic expansion in the 1970s – growth in the decade averaged 7.9% yearly – but it was during the 1980s that growth really took off in a manner the man on the street could feel the rising tides. The expansion of the 1990s would have been far greater if it was not for the devastating Asian Financial Crisis. The 1998 recession remains Malaysia’s worst yet. – Hafiz Noor Shams Malaysian commentators state, “One of Mahathir’s signal triumphs was to have persuaded Malaysian society that ‘less politics’ and ‘more economics’, ‘less democracy’ and ‘greater stability’ were the guarantees of continues prosperity.” From 1991-1995 the economy boomed. The average gross domestic product, GDP, was 8.7 per cent per annum, the inflation rate was 3.8 per cent and the unemployment rate was only 2.5 per cent. Malaysia had a low foreign debt of $45.2 billion. The banking sector was strong with a debt amounting to only 3.6 per cent of the total sum borrowed. Mahathir and his government implemented restrictions on foreign borrowing and banking regulations, which in turn caused Malaysia to avoid the banking collapse which occurred in the neighbouring countries during the Asian financial crisis. Today, Mahathir’s contribution can be seen on what is Malaysia today. Kuala Lumpur won’t look the same without Mahathir. Proton won’t have been possible without Mahathir’s Look-East Policy. But some hated Mahathir because of cronyism that brought failure to some of his projects. To be hated or liked, that is up to the people. But Malaysia did change during Mahathir and that is how it came to be one of Tiger economies in Southeast Asia . Mr. Mahathir Mohamad delivered a near first-world economy to his people, which is characterised by high standards of living. Malaysians today have much higher levels of income than twenty years ago when Mr. Mahathir Mohamad first came into power. A real manifestation of the success of Malaysia under the political leadership of Mahathir Mohamad is when Malaysians ventured into the third world countries’ economy as investors. As a leader, he always cleared about what he is doing and what will bring benefits to our country. This is what we can learn from him, make a correct decision and work it out to achieve the goals.Indeed there has been a fundamental transformation of Malaysian economy/society and its people. Former Prime Minister Mahathir Mohamad by his utterances was not a supporter of western values but he was not an anti capitalist either. He understood the requirements of the market place. He knew and accepted that the survival of Malaysian enterprises and the economy as whole depended on market expansion. Policies were therefore put in place that took advantage of access to advanced knowledge and new technologies that facilitated the growth of Malaysian enterprises. Tun Mahathir is very sensitive to the fast changing world. As a leader, we should be aware of the changing of the world and take the correct action on it. The introduction of innovations by tun Mahathir had led to the creation of new industries and improvement in the productive capacity of the economy generally and, in so doing, cemented the survival of Malaysians within the context of globalisation. In 1980, the year before Mahathir Mohamad became Prime Minister, Malaysia’s gross domestic product was just $12 billion. By last year, it had grown to $210 billion, and per capita income stood at $3,540, the third-highest in Southeast Asia. Hal Hill, professor of Southeast Asian Economies at Australian National University in Canberra, Australia, explains how Malaysia managed that remarkable growth under Tun Dr Mahathir. Malaysia has been one of the most successful economies in the Third World. There are fairly straightforward reasons. It’s one of the most open economies in the world. There are a few trade barriers but not very many. It’s very open to foreign investment. Of course, [after the 1997-98 Asian crisis] there were capital controls on short-term flow. But that didn’t affect foreign investment. Second, Malaysia has been pretty good on macroeconomic management. It consistently has very low inflation. It has never had a balance-of-payments crisis in its history, which is a very important achievement. Third, Malaysia has always had excellent physical infrastructure — great roads, harbors, and telecoms. Fourth, institutions have been fairly high quality and reasonably independent. It inherited a British-style civil service, which has been maintained. IN a rare splash of praise, the World Bank has profusely lauded the Mahathir Mohamad government for its brainiac moves in the aftermath of the Asian Financial Crisis or AFC. While saying the Mahathir government took the classic steps to prevent the economy from sinking further after the financial crisis started to bite hard into the country, the World Bank said with high regards to the then regime that its gambit worked. It further said the rest of the world should have learned from the government of Mahathir on how it handled the catastrophe bravely and with wisdom, in order to prevent such happenings again. The report is entitled ‘Turmoil to Transformation: 20 Years after the Asian Financial Crisis’. the World Bank said the Mahathir government quickly learned that the stabilization of the ringgit was crucial to the success of the Government’s plan. At that time, in 1998, the ringgit had plunged to its lowest rate versus the US Dollar. But Mahathir made a bold move by fixing the exchange rate at RM 3.8 to US$ 1. This was “Perhaps Malaysia’s most controversial measure was to introduce selective capital controls.” said the WB in its report. To explain it plainly for the laymen, the World Bank is saying the move by Mahathir salvaged the country and this move might have saved the country to be what it is today. The World Bank said during the first months of the crisis, Malaysia saw a huge amount of capital leaving the country. It is called capital outflow. This resulted in the ringgit depreciating significantly (that is losing its value rapidly). To stabilize the currency and to create a higher degree of certainty for exporters and importers, which will enable them to more accurately forecast revenues and costs, the Government fixed the exchange rate at RM 3.8 to US$ 1. The world was on the move, but Mahathir pressed on. And the gambit paid out for the country, until today! The World Bank said the implementation of this measure was intended to enable Malaysia to regain monetary independence.

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